JOHNSON & JOHNSON
For the period ended Apr 25, 2024. Filed Mar 13, 2024.
View on SEC.govAbout this filing
What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
Apr 25, 2024 · Filed Mar 13, 2024
Contents
Proxy Statement – summary
2024 Proxy Statement – summary
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider. Please read the entire Proxy Statement carefully before voting.
| 1 | Election of 13 Director nominees |
| •Diverse slate of Director nominees with broad and relevant leadership experience.•All nominees are independent, except the Chairman and CEO.•Average director tenure is five and a half years, with frequent refreshment. |
Director snapshot
Independence
| n | Independent |
|---|
Diversity
| n | Women |
|---|---|
| n | African-American/Black |
| n | Hispanic/Latino |
Average age
| n | 50s |
|---|---|
| n | 60s |
| n | 70s |
Average tenure
| n | 0-2 years |
|---|---|
| n | 3-5 years |
| n | 6-9 years |
| n | 10+ years |
Director skills
| 7 out of 13 | 5 out of 13 | 12 out of 13 | 9 out of 13 | 8 out of 13 | |||
| Academia/Government | Digital | Executive Leadership | Financial | Healthcare Industry | |||
|---|---|---|---|---|---|---|---|
| 9 out of 13 | 6 out of 13 | 8 out of 13 | 8 out of 13 | ||||
| International Business/Strategy | Marketing/Sales | Regulatory | Science/Technology | ||||
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| 2 | Advisory vote to approve named executive officer compensation (Say on Pay) |
| •The Compensation & Benefits Committee provides independent oversight with the assistance of an independent external advisor.•Executive compensation targets are determined based on an annual review of publicly available information and executive compensation surveys among the executive peer group. |
Base salary, annual incentive and long-term incentives
Below we describe the components of our total direct compensation, how we determine each component's amount and why we pay them.
| Component | Form | Vesting /performance period | How amount is determined | Why we pay each component |
|---|---|---|---|---|
| Base salary | Cash | Ongoing | •We base salary rates on:•Competitive data•Scope of responsibilities•Work experience•Time in position•Internal equity•Individual performance | •Recognizes job responsibilities. |
| Annual incentive | Cash | 1 year | •We set target awards as a percent of salary based on competitive data.•We determine award payouts based on business and individual performance. | •Motivates attainment of our near-term priorities, consistent with our long-term strategic plan. |
| Long-term incentives | Equity | 3 years (options: 10-year term) | •We set target awards as a percent of salary based on competitive data.•We grant long-term incentives based on business and individual performance, contribution and long-term potential.•We determine payouts based on achievement of long-term operational goals, total shareholder return (TSR) and share price appreciation. | •Motivates attainment of our long-term goals, TSR and share price growth.•Retains executives. |
| 2024 Proxy Statement | 9 |
|---|
Long-term incentives
Below we describe the forms of long-term incentives we use for our named executive officers, their weighting, performance periods, how the payouts are determined and why we use them.
| Long-termincentive form | Mix | Vesting /performance period | How payouts are determined | Why we use them |
|---|---|---|---|---|
| Performance share units (PSUs) | 60% | •0% to 200% vested three years after grant | •1/2 Earnings per share: three-year cumulative adjusted operational EPS.•1/2 Relative TSR: three-year compound annual growth rate versus the competitor composite peer group.•Share price | •Aligns with our long-term objective of growing quality earnings.•Reflects overall TSR outcomes relative to our competitors.•Ties PSU value directly to the share price. |
| Options | 30% | •1/3 of grant vests per year•10-year term | •Share price appreciation | •Motivates share price appreciation over the long-term.•Reinforces emphasis on long-term growth aligned with our objectives. |
| Restricted share units (RSUs) | 10% | •1/3 of grant vests per year | •Share price | •Ties RSU value directly to the share price. |
Notes:
Cumulative adjusted operational EPS is a non-GAAP measure. See page 88 for details.
No dividend equivalents are paid on our PSUs, options or RSUs.
Beginning with the February 13, 2023 grant, options and RSUs vest one-third per year on each of the first, second and third anniversaries of the grant date. Options and RSUs granted before February 13, 2023 are 100% vested on the third anniversary of the grant date.
2023 Say on Pay results
Approximately 93.2% of shares voted supported Say on Pay at our Annual Meeting in 2023. We continued to discuss our executive compensation program with our shareholders during the 2023 engagement cycle, and we describe in more detail our Say on Pay results, what we heard and what we did on page 61.
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| 3 | Ratification of appointment of independent registered public accounting firm |
| •PricewaterhouseCoopers LLP is an independent accounting firm with the breadth of expertise and knowledge necessary to effectively audit our business.•Independence supported by periodic mandated rotation of the audit firm's lead engagement partner.•New lead engagement partner selected in connection with the mandated rotation every five years. |
| 4 | Shareholder proposal - gender-based compensation gaps and associated risks |
| •Johnson & Johnson has long been a leader in employee benefits programs, which remain among the best in our industry. •The proposal does not identify a gap in coverage with respect to the Company’s benefits and the purported risk is not relevant to the Company’s operations. |
| 5 | Shareholder proposal - impact of extended patent exclusivities on patient access |
| •Johnson & Johnson uses patents to enable continued innovation in support of patient access and choice. •Johnson & Johnson has already demonstrated a strong commitment to expanding patient access to its products. •Despite this proposal receiving limited support in 2023, Johnson & Johnson increased its patent-related disclosures following the 2023 Annual Meeting of Shareholders. |
| 2024 Proxy Statement | 11 |
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